Sin stocks make the big jumps

Shares in “vices” such as tobacco, gambling and alcohol tend to thrive, so should investors throw scruples aside?

S
tock market returns over the past decade have been so disappointing that many retirement savers have given up on conventional managed funds.

With annualised returns of just 3%, which fall into negative territory after inflation, and hefty management costs, many now prefer to keep what surplus funds they have in cash. Yet not all shares and not all sectors of the market have performed so dismally.

In his book The Future for Investors, Jeremy Siegel found that the most profitable stock market investment in American history was Altria. The tobacco giant, makers of Marlboro, prospered despite decades of a falling number of smokers in the west and an endless string of punitive lawsuits.